Is it me of is there a large firm downgrading second half GDP estimates literally every few days lately?
Goldman just cut their GDP outlook for the second time in a month at the end of last week. Their call flew in the face of the risk-on resurgence in stock and commodity markets we witnessed headed into Labor Day.
So what does the Squid see going forward? Here’s Colin Barr at Fortune:
… economists at Goldman Sachs last week cut their economic growth forecast for the second time in a month, only to warn a few days later that “we already see downside risk to that estimate.”
Goldman now sees the U.S. economy struggling to limp forth at a 3% pace in the second quarter, down from 3.5% just three weeks ago and 4% at the start of the year. The firm expects the economy to have added just 150,000 jobs in April – down from 244,000 in March and well below the 178,000 CNNMoney forecast.
Is deceleration at this point in the cycle to be expected? The bat-out-of-hell rebound in the data from 2009 surely couldn’t have been expected to last forever. Let’s see who else comes out of the woodwork with downward revisions and hope the Double-Dip crowd can keep it’s pants on until the evidence actually shows up.